If your total credit limit is ₹5 lakh and you've already spent ₹4.5 lakh, it's best to pay off your old balance first. In this case, making new transactions will push your credit utilization ratio to 90%, which is considered extremely poor. Experts recommend keeping this ratio below 30%. Repeatedly spending close to your limit can lower your CIBIL score and hinder future loan or card limit increases.

Never use your credit card to withdraw cash from an ATM. Doing so will incur a cash advance charge of 2.5% to 3%, plus daily interest, without any grace period. This means that interest accrues from the day you withdraw money. Even if you withdraw ₹10,000, the amount could grow to ₹10,400 or more in a month, including interest.

If you don't have the money to pay the full amount, postpone using your credit card for now. Many people try to avoid this by simply paying the "Minimum Due" amount, but this only increases the interest. For example, if your bill is ₹50,000 and you only pay the ₹5,000 minimum due, interest will continue to accrue daily on the remaining ₹45,000. As a result, your debt will continue to grow, and the interest can be a burden on your pocket.

If you're relying solely on a credit card to purchase an expensive gadget or travel package without a clear payment plan, this move could trap you in debt. According to experts, make large purchases only if you have financial backup or an installment plan to pay for them.

Caution is essential when making online payments. If the website name or URL appears suspicious, or lacks HTTPS security, sharing card details there is not without risk. Using your card on such sites poses the risk of data theft, fraudulent transactions, or hacking.

If you have a habit of paying bills after the due date every month, you are harming your credit score. Banks impose late fees, interest charges, and a negative impact on your CIBIL report for every late payment. Therefore, try to set up auto-debit or turn on reminder alerts to ensure that payments are not late in any month.

If you already have a personal loan, EMI, or other liabilities, adding new expenses to your credit card can increase your financial risk. In such cases, debit card or UPI transactions are a better option, as you only spend what is available in your account.

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